Programmatic Fact vs. Fiction

This column was guest authored by Orchard Richardson, general manager and senior vice president (SVP) of publisher and media solutions at 33Across.

With programmatic growth projected to reach a spend of $14.88 billion in 2015, it may seem surprising that there are some major mental barriers that roadblock publishers and advertisers from investing their time and money programmatically. Programmatic buying has preconceptions for both sides of the equation that unfortunately are more fiction than fact. Publishers and advertisers alike need to take a closer look at some of the “obstacles” that may be preventing them from taking advantage of one of the biggest technological advancements in digital advertising.

Publisher Perceptions

Fiction: Programmatic cannibalizes direct sales opportunities.

Many publishers are wary that selling their inventory programmatically puts their direct sales initiatives at risk. In actuality, advertisers go directly to publishers with their branding budget but use their direct-response budgets programmatically. If publishers continue to think that programmatic selling cannibalizes direct sales, they’ll miss out on large opportunities. Direct sales teams would be more strategic and focus on their top advertiser opportunities that are in market. Programmatic selling also allows sales teams to cover more ground, increase revenue, and broaden the scope of a site’s buyers. The cherry on top of this is the new market intelligence gained programmatically. Sales leadership can now practice what they preach and focus their teams on the 20 percent of advertisers that represent the majority of their spending and opportunity.

Fiction: Programmatic decreases eCPM.

CPMs are declining industry-wide, but this is not due to programmatic. The decline stems from the almost infinite supply of standard IAB units, which drives down prices. Additionally, publishers who implement unrealistic programmatic CPM floors to align with their brand rate cards may be contributing to the decline of their site’s eCPMs. If publishers allow for natural competition, it may actually increase their eCPM and drive up fill rate, giving publishers the true value of their inventory and increasing overall gross revenue.

Fiction: Lower-quality advertisers, less money.

As more advertising dollars shift from traditional ad spend to programmatic, most brands that you can think of are already buying programmatically. Publishers can work with quality demand partners who will connect them with trusted brands. Publishers just need to do research and ask the right questions. Who are their clients? Do their creative formats meet IAB standards? What brand safety tools do they employ? Many partners will also manage category blocks that don’t meet your standards (e.g. pornography, diet sites, etc.). You can also manage settings yourself on many dashboards.

Advertiser Perceptions

Fiction: Programmatic = Poor Inventory

Many brands are wary to invest in programmatic since they believe they would put their brand at risk with poor-quality inventory. Similar to how most brands are dipping their toes in the programmatic pool, the large majority of publishers work programmatically; even the publishers that have direct relationships with brands. Publishers do not want to miss out on this revenue stream, especially as more money migrates into programmatic. There is little difference between inventory offered directly and programmatically. Of course, there is a broader source of inventory offered programmatically and just like publishers, buyers need to beware before investing on certain platforms. Do your research and work with platforms to put standards in place that are right for your brand.

Fiction: Programmatic buying does not help branding campaigns.

Yes, programmatic buying is usually thought of as a direct-response buying tactic, but don’t pigeonhole programmatic – you’ll miss out on brand awareness opportunities. With the series of levers that can be pulled, brands can find new audiences and consumer markets that may otherwise go untapped. Programmatic media buying creates an unbelievable amount of efficiency for brand marketing, allowing brands to scale hard to identify audiences with high-impact and video advertising. Market intelligence is the added bonus of programmatic buying; brands can uncover new market segments.

With a little education and research, publishers and advertisers can really take advantage of the power of programmatic. That’s not to say that programmatic has completely evolved. We still have strides to make as an industry, such as streamline buying and having standard naming conventions. While the rest of the industry is playing catch-up, both publishers and advertisers can break out of the programmatic roadblocks.

Orchid Richardson is general manager and senior vice president (SVP) of publisher and media solutions at 33Across, Inc., where she is charged with overseeing the platform that supports more than 1 million online publishers including premium brands like Demand Media, Conde Nast Viacom, and Time, Inc. Prior to joining 33Across, Orchid was head of digital operations for Hearst Magazines Digital Media.